21 February 2011Pl see CARO in word format which I have prepared for a company. Suitably modify.

ANNEXURE TO THE AUDITOR’S REPORT

(Referred to in paragraph 3 of our report of even date)

(i) (a). The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b). The fixed assets have been physically verified by the management at reasonable intervals which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

(c ) No fixed assets have been disposed off during the year so as to affect the going concern status of the company.

(ii) (a) Physical verification of inventory has been conducted by the management at reasonable intervals.

(b) The procedures of physical verification of inventory followed by the management is reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The company is maintaining proper records of inventory. No material discrepancies were noticed were noticed on such physical verification.

(iii) (a) The company has not granted any loans, secured / unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) The company has taken unsecured loans from parties covered in the register maintained under section 301 of the Companies Act 1956. The number of parties covered are one in number and the total amount involved is 8,20,000/-

(iv). In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory and fixed assets. The company has not made sale of goods during the year. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

(v) Based on the examination of the books of accounts and related records and according to the information and explanations provided to us, there are no contracts or arrangements with companies, firms or other parties which need to be listed in the register maintained under section 301 of the Companies Act, 1956.

(vi) The company has not accepted any deposits from public during the year.

(vii) According to the information and explanations given to us, the central government has not prescribed the maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 for the products of the company.

(ix) The company has not applied the term loan other than for the purpose for which the loans were obtained.

(x) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.

(xi) In view of the nature of business carried on by the Company clause No.4 (xii), (xiii), (xiv) of the order referred to in para 3 of our report of even date are not applicable to the company. Further, in view of the absence of conditions prerequisite to the reporting requirement, clause (iii) (b), (c), (d), (vii), (ix)(a) and (b),(x),(xi),(xv),(xvii), (xviii), (xix) and (xx), of the said order are, at present, not applicable to the company.